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Speaker 1: Gdpigures were worse than we thought. It fell by one

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Speaker 1: percent in the three months ending September to be one

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Speaker 1: point five percent lower than a year ago. The year

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Speaker 1: this officially makes it the biggest recession since nineteen ninety one.

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Speaker 1: The GDP and Q two being revised down. Henry Russell

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Speaker 1: is the A and Z economist and joins you right

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Speaker 1: now looking at this car crash, Henry, how did you feel?

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Speaker 2: Well? There was certainly some shock factor yesterday when we

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Speaker 2: saw the numbers. It really is to do with these

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Speaker 2: large revisions we've seen in the last two quarters, and

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Speaker 2: as you note, this is now the largest contraction of

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Speaker 2: six month period going back to nineteen ninety one. That

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Speaker 2: being said, you know, one might take from that that

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Speaker 2: things that they're slowdown has certainly been much worse than fared,

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Speaker 2: but it hasn't necessarily changed our expectation on what lies ahead.

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Speaker 2: If you think about these data, they cover a period

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Speaker 2: that finished nearly three months ago. Now, in that time,

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Speaker 2: the Reserve Bank has delivered one hundred basis points of

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Speaker 2: cuts and we're seeing signs that the economy is or

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Speaker 2: responding in high frequency indicators. So the hope is that

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Speaker 2: this does bring to a close the economy's traveling period

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Speaker 2: over the past couple of years, and we will see

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Speaker 2: a return to growth in the coming quarter.

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Speaker 1: Should the government be investing more? And I say this

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Speaker 1: because Cameron bagg We said at the beginning of the week,

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Speaker 1: you know, they've got to cut their spending, but they've

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Speaker 1: also got to keep you know, firing on their part

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Speaker 1: of the economy because they have a responsibility to do that.

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Speaker 1: And of course the CEE to you, who you know,

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Speaker 1: left leaning anyway, I say, oh, you should be investing

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Speaker 1: in during a recession because it's never been cheaper, which

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Speaker 1: I don't know where they got that from, but whatever.

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Speaker 1: Should they be continuing to spend, but it's going to

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Speaker 1: be wise spending.

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Speaker 2: I think it is important to note that, you know,

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Speaker 2: going back to what the Treasury said in the half

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Speaker 2: year update on Tuesday, the government is running structural fiscal

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Speaker 2: deficits for as far as the eye can see. And secondly,

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Speaker 2: the stabilizing stabilizing the economy is not necessarily the role

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Speaker 2: for government. It is actually the responsibility of the Reserve

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Speaker 2: Bank through interest rates and the reason and the reserve

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Speaker 2: banks certainly could cut interest rates further based on the

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Speaker 2: data yesterday, but there's still some lingering inflation challenges out there.

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Speaker 2: The Reserve Bank will need to weigh that against design

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Speaker 2: the economies responding. So while we are traditionally fiscal policy

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Speaker 2: should be countercyclical in nature, and by that use the

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Speaker 2: government should be spending during slowdowns or that's traditionally what's happened,

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Speaker 2: but there's no money left in the kiddy. Essentially, we

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Speaker 2: do need to go through this period of consolidation because

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Speaker 2: there is going to be another shock on the horizon

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Speaker 2: at some point, and if we continue on the path

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Speaker 2: we're on, we are not going to be able to

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Speaker 2: respond to that crisis as may be necessary. So there Reserve,

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Speaker 2: I mean, the government certainly needs to balance both both

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Speaker 2: sides of that.

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Speaker 1: Well said, Henry, enjoy your Christmas as well, Thank you

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Speaker 1: so much for waking up early for us, and go

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Speaker 1: well Merry christmasy Man very Christmas.

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Speaker 2: Yeah.

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Speaker 1: I see that the Bank of England has kept interest

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Speaker 1: rates the OCR at four point seventy five percent and

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Speaker 1: the warning of stagflation for England. They are bad. There

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Speaker 1: are bad economic newses all over the world right now.

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Speaker 1: There's all sorts of flows. Could there be war, could

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Speaker 1: there be another earthquake, Could there be all sorts of stuff.

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Speaker 1: We need to get the house in order, even though

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Speaker 1: it hurts. I'm sorry. I'm sorry.

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Speaker 2: For more from Early Edition with Ryan Bridge.

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Speaker 1: Listen live to news Talks it'd be from five am weekdays,

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